The article reports the results of studies on the effect of chitosan (0, 5, 10, 20, 30, and 40 wt %) on thermal and mechanical properties of poly(hydroxybutyrate) composites. The addition of chitosan causes an increase in the glass transition temperature (Tg) while a decrease in the enthalpy of fusion (DHfus), crystallization (DHcry) and percentage of crystallinity as determined by differential scanning calorimeter (DSC). The thermogravimetric analysis reveals that high amount of chitosan decreases the thermal stability of the composites. The Young’s modulus of the composite increases and is high for the composite having 40 wt % of chitosan. Increase in the amount of chitosan decreases the elongation at break and impact strength of composites. Finally, the Young’s modulus of the composites has been compared with the theoretical predictions.